Stocks closed mostly lower yesterday with only the Nasdaq finishing with a modest gain. But they all ended meaningfully off their intraday lows.

Yesterday's Employment Situation report was a mixed bag.

Nonfarm payrolls for November came in at 64,000 (69K in the private sector and -5K in the public sector), vs. the consensus for 40,000 (30K private and 10K public). The unemployment rate ticked up to 4.6% from the previous 4.4% and views for 4.5%. The participation rate ticked up to 62.5% from 62.4%.

In November, the sectors with the largest job growth came from the following: Health Care added 46,000 new jobs; Construction gained 28,000; and employment in Social Assistance was up 18,000.

Job losses came from Transportation and Warehousing, which decreased by -18,000; and Federal Government jobs were down by -6,000.

The report also included numbers from October. That showed a decrease of -105,000 jobs. While the private sector gained 57,000 jobs, the government lost -162,000 jobs.

We also saw revisions to previous months. September, which originally showed a gain of 119,000 new jobs, was revised lower by -11,000 to 108,000. And August, which originally showed a loss of -4,000 jobs, was lowered by an additional -22,000 for a loss of -26,000 jobs.

The better-than-expected November showing provided a bit of relief after the large drop in October, and downward revisions in prior months.

But it's clear the labor market is weakening. And the Fed seeing more risk there than inflation was underscored with yesterday's report.

That bodes well for another rate cut sooner rather than later. The next FOMC Announcement comes on January 28, 2026. The odds for a January rate cut are currently at 24.4%, with March 18^th at 52.6%. (There is no meeting in February.)

In other news, Retail Sales (for October) were flat at 0.0% m/m vs. last month's 0.1% and estimates for 0.2%. Ex-Vehicles it was up 0.4% vs. last month's 0.1%. Ex-Vehicles & Gas it was up 0.5% vs. last month's 0.0%.

With the jobs numbers behind us, investors will be watching the Consumer Price Index (CPI), and Personal Consumption Expenditures (PCE) inflation numbers on Thursday and Friday.

In the meantime, today we'll get Retail Sales for November, MBA Mortgage Applications, Business Inventories, and the Atlanta Fed Business Inflation Expectations.

We'll also hear from Fed policymakers Christopher Waller, John Williams, and Raphael Bostic as they speak at their respective engagements throughout the day.

On Monday, Tesla's stock surged by 3.56% on reports that its Robotaxis were spotted driving in Austin without any human monitors in the cabs. Elon Musk confirmed those reports by saying, "testing is underway with no occupant in the car." Alphabet's Waymo is the current leader in driverless taxis. But Tesla's Robotaxis (and eventual Cybercabs), are expected to overtake Waymo in both performance and scale.

Those gains continued again yesterday with another 3.07%, launching Tesla to new all-time highs in the process.

We'll see if the market can regroup today and get the expected end-of-year rally back on track.

See you tomorrow,